The Buddha’s guidelines on how to look after your money

It’s like a bee gathering pollen in harmless ways to bring it back to the hive – the tiny pollen that it collects, over time, becomes huge stores of honey that is able to feed the whole colony.

Now you might be surprised that the Buddha didn’t just teach about letting go and renunciation and giving up money. To the monks and nuns, he usually spoke about that. But not all the Buddha’s teachings are like that.

We lay followers of the Buddha have families to take care of. The Buddha was not against lay people making money – as long as it was earned rightfully. And we need to be careful with our money, which we’ve worked hard for so that it won’t be squandered or wasted away or lost to some stupidity – then this money can be used to look after our family, our selves and used to do good works.

The Buddha didn’t automatically hate rich people – in fact, different Kings used to go to the Buddha for advice. The Buddha never subscribed to “They are rich and powerful – therefore they are evil” mentality.

Now if someone is rich and powerful because they came to their money through corruption – through cheating people, stealing and harming others. Now this is wrong.

If, on the other hand, someone came to their money through honest means, through right livelihood, through working hard – then this is okay. Remember, right livelihood is one factor of the Noble Eightfold Path.

Maybe some people are millionaires or even billionaires – it does not automatically make them evil. It is a person’s deeds which make a person good or evil – not the amount of money they have in the bank.

Maybe you know someone who is rich but they earned their money rightfully – don’t hate them for it. And if someone has earned their money through honest means, ethically and not cheating anyone else – don’t be jealous of them.

Maybe instead of partying and going out all the time – they worked many hours a day, 6-7 days a week for many, many years, paying all their taxes throughout, sacrificing their social life, sacrificing time with their family and even sacrificing their health for years – to be able to save enough to get to where they are now – to be able to look after their families and to do good works.

Now if you don’t want to accumulate wealth, then you don’t have to follow this particular piece of advice from the Buddha. But I do know that some of you are struggling financially, so there might be some tips here that you can take up if you so choose.

The Buddha’s advice to lay people like us if we want to look after our families – is to accumulate wealth – then family and household life can follow:

The wise endowed with virtue Shine forth like a burning fire.

Gathering wealth as bees do honey and heaping it up like an ant hill. Once wealth is accumulated, family and household life may follow.

By dividing wealth into four parts, True friendships are bound;

One part should be enjoyed;

Two parts invested in business;

And the fourth set aside Against future misfortunes.

So, in the Sigalovada Sutta (which has lots of good advice for lay followers), the Buddha said – divide your pay (after tax) into 4 parts:

25% – 1 Part to be enjoyed and used however you want

50% – 2 Parts to be invested in business

25% – 1 Part to be saved for emergencies

Obviously you don’t have to have exactly these percentages – but it gives you a rough idea cos each part can be a smaller part of a bigger part according to your personal circumstances.

So you need some money to be able to enjoy your life – otherwise, what’s the purpose of lay life? Only spend about a quarter of your pay after tax to enjoy yourself.

Notice also that the Buddha recognized that investing and owning a business (rather than just be an employee) can be a good way to accumulate your wealth – and a large part of your earnings ~50% should be devoted to this.

Now obviously, you’ll need to be wise with your money, make good business decisions and develop skills to run a business well. So you still need to put in effort and watch the bottom line – otherwise you can still go broke. Nothing is a guarantee in life – life is uncertain (anicca).

No matter what you do – whether it be investing it in managed funds, investing in property or investing in your own business – you still need to understand what you’re doing – otherwise you can still lose money easily. So a good mantra is – if someone wants you to invest in something where they talk big with promises of how you’re certain to make money – if you don’t understand it, don’t do it. Protect what you have.

And you also need a quarter of your pay saved up as emergency funds (this includes buying insurance for the different areas of your life). Don’t just spend your whole pay packet as soon as you get it – you need to prepare for unforeseen circumstances.

Don’t expect the government or other family members to always be able to look after you (i.e., free healthcare or free pension benefits) because what if the laws change? Governments change and will do whatever they do – don’t rely on them. Take some responsibility to ensure that you have enough spare cash saved up so that can pay your own way if a disaster ever strikes.

And with this 25%, you can also make sure that you have adequate insurance bought – which can save you money, say – if something happens to your car or house or your health or something happens such that you can’t work anymore, or if someone else gets hurt by your car accidentally. Make this a priority or you will forget to do it or say you were too busy.

And by doing these things with your after tax pay packet, little by little, you gather money in harmless ways – just like how bees, little by little, gather pollen in ways that do not harm other creatures – to build up huge stores of honey back at the hive. And then sooner or later, before you know it, the amount of wealth becomes large like an anthill. And once gathered, you can look after your family with it – you can look after your parents with it, you can look after your husband or wife with it and you can look after your kids with it. Just like how the stores of honey can feed the whole hive of bees including the Queen bee.

So that’s how lay people can create a financial foundation for themselves (rather than living your life broke and destitute and having to rely on others for charity), according to the Buddha.

You bring up a good point. If you look up the footnotes to Narada Thera’s translation of the Sigalovada Sutta, he says that Dana or charity/generosity/giving can be done from any portion of the first 25% that you can do whatever you want with.

Obviously, there is no obligation to do so or to do so on a regular basis, but it’s nice to be able to do so and be able to do so regularly.

Further the perfection of giving doesn’t just entail the giving of external wealth – you can also give your time, effort, support, advice etc… (which other sections of the Sutta addresses). The highest form of giving, is the giving of Dharma.